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  1. Worth Wray razor sharp as usual. I cannot help wondering how long it will take divergence to morph into convergence. Not in 2016, I sense. However, I am not sure what form convergence can take as ECB seems on a QE escalator it can never get off as long as EMU survives (which is not inevitable) as increasing government deficits will have to be monetised. ECB already stepped in on weaker sovereign bonds with its SMP programme and now has achieved a situation that EZ sovereign yields move together. Admittedly yields are still in a pricing hierarchy that reflects previous credit perceptions but for how long? Finally, I do not believe monetary policy can stop the current global slowdown so governments may be tempted or forced to tax and borrow, creating even bigger problems down the road. I share Worth’s concerns but I seem much gloomier than he is.

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